Searching for New Banks with Potential to Issue Brokered Certificates of Deposit

Many banks are looking for alternatives to raising rates or using advances from the Federal Home Loan Bank to attract new deposits. Banks with strong loan growth may raise funds and generate liquidity through issuing federally insured certificates of deposit (CDs). A large number of banks utilize the brokered CD market to satisfy their funding requirements. The recent economic crisis tested and tried banks and credit unions, their deposit insurance, and their ability to protect household savings. Financial regulators reacted to the extraordinary circumstances of the crisis by expanding the coverage offered in existing deposit insurance arrangements. Deposits (including CDs) are currently insured to $250,000.

Using IDC Financial Publishing, Inc.’s (IDC) deposit database could help identify what banks might be good prospects for issuing brokered CDs. Sorting the quarterly data provided can quickly show which banks are increasing time deposits and which banks are utilizing brokered deposits in their financial plan. IDC provides maturity information for time deposits to enable the user to determine which banks will be looking for funding and when. Another sort could be by loan growth which may pinpoint institutions that are more open to alternative methods of funding.

As an example, since IDC knows the current banks with CUSIPs issuing brokered CDs along with their characteristics as to loan and deposit growth, sorting can identify those institutions with strong loan and deposit growth not on the CUSIP list.

IDC’s database also contains information on other types of deposits such as, savings, MMDA, and demand deposits. The user can sort the data to obtain information pertinent to their goals and objectives.

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